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After studying this chapter, students should be able to understand the following:

A. Conflict

B. Conflict and Negotiation


This lecture takes an in-depth look at conflict management and negotiation, key aspects of contemporary

organizational behavior. After examining the two views of conflict, the consequences of conflict, and the

types and levels of conflict, the chapter discusses culture and conflict, conflict management styles,

organizational sources of conflict, and conflict management strategies. The chapter goes on to explore


A. Conflict

Conflict is the process in which one party perceives that its interests are being opposed or negatively

affected by another party. Conflict is a process in which people disagree over significant issues, thereby

creating friction between parties. Conflict can exist when people have opposing interests, perceptions, and

feelings; when those involved recognize the existence of differing points of view; when the disagreement is

ongoing; and when opponents try to prevent each other from accomplishing their goals. Although conflict

can be destructive, it can also be beneficial when used as a source of renewal and creativity. Competition,

rivalry between individuals or groups over an outcome that both seek, is not the same as conflict. In

competition, there must be a winner and a loser; with conflict, people can cooperate so that no one wins or


Organizational conflict occurs when a stakeholder group pursues its interests at the expense of other

stakeholders. Given the different goals of stakeholders, organizational conflict is inevitable. Conflict is

associated with negative images, such as unions getting angry and violent, but some conflict can improve

effectiveness. When conflict passes a certain point, it hurts an organization.

I. Transitions in Conflict Thought

Under traditional view conflict is a process in which

people disagree over significant issues, creating friction

between parties. One view of conflict is that it is

dysfunctional and harmful to organizations, because the

struggle over incompatible goals is a waste of time that

prevents people and organizations from being

productive and reaching their potential. On the other

hand, interactionist view states that when conflict is

based on issues rather than personalities, it can enhance

problem solving and creativity. Open discussions of

differing viewpoints allows for a thorough consideration

of alternatives and their consequences in the course of

decision making. Conflict can also increase motivation

and energize people to focus on a task. Human relation

view states that Conflict is a natural occurrence and we should accept conflict

II. Conflict Good or Bad

Conflict can have both positive and negative consequences. On the positive side, conflict can bring energy

to a competition and focus participants on the task at hand. It can also increase group cohesion and

stimulate open discussion of issues. On the negative side, conflict can cause participants to lose sight of

common goals and focus on winning at all costs. In addition, it can lead to distorted judgments and a lack

of cooperation. Finally, the losers in a conflict feel demoralized and lose motivation; this loser effect harms

long-term relationships and overall organizational performance.

III. How can conflict improve effectiveness?

Conflict can overcome inertia and introduce change, because conflict requires an organization to reassess its

views. Different views are considered, and the quality of decision-making is improved.

IV. Types and levels of Conflict

There are four types of conflict. Inter-group conflict

occurs when groups within and outside the

organization disagree on various issues.

Interpersonal conflict is due to differences in goals,

values, and styles between two or more people who are

required to interact. Intra group conflict occurs

within a work group over goals and work

procedures. Intrapersonal conflict is a person's

internal conflict over divergent goals, values, or

roles. Inter group conflict can occur at two levels

which are horizontal and vertical. Horizontal

conflict takes place between departments or groups at

the same level of the organization. In contrast,

vertical conflict occurs between groups at different levels of the organization.

Types of Conflict

􀁺 Task conflict: Conflicts over content and goals of the work

􀁺 Relationship conflict: Conflict based on interpersonal relationships

􀁺 Process conflict: Conflict over how work get done

V. Individual Conflict Management Styles

a. The obliging style of conflict management is based on low concern for self, high

concern for others, and

focusing on the needs of

others while satisfying or

ignoring personal needs.

This works best when

issues are unimportant,

knowledge is limited,

there is long-term give

and take, and the person

managing the conflict

has no power.

b. The avoiding style is

based on low concern

for self and others and a

focus on suppressing,

setting aside, and ignoring the issues. This is appropriate when the conflict is too strong

and parties need to cool off.

c. The integrative style shows high concern for self and for others and focuses on

collaboration, openness, and exchange of information. This is used when issues are

complex, when commitment is needed, when dealing with strategic issues, and when longterm

solutions are required.

d. The dominating style shows high concern for self, low concern for others, and focuses

on advancing own goals at any cost. This is used when time is short, issues are trivial, all

solutions are unpopular, and an issue is important to the party resolving the conflict.

e. The compromising style shows moderate concern for self and others and focuses on

achieving a reasonable middle ground where all parties win. This is used when goals are

clearly incompatible, parties have equal power, and a quick solution is needed.

VI. Manager’s ways to manage conflict.

Managers can manage conflict by either preventing or reducing high levels of conflict or stimulating low

levels of conflict. To do this, managers can apply a behavioral approach or an attitudinal approach. The

behavioral approach targets the behavior causing the conflict, while the attitudinal approach targets the

roots of the conflict, including people's emotions, beliefs, and behaviors. Behavioral methods include

enforcing rules, separating the parties, clarifying tasks, having a common enemy or outside competition, and

increasing resources and rewarding cooperation. Attitudinal methods include having a common enemy,

rotating members, increasing resources, and team-building and organizational development (OD). To

stimulate conflict, managers can introduce change, increase task ambiguity, or create interdependency.

B. Conflict and Negotiation

Stakeholders compete for the resources that an organization produces. Shareholders want dividends,

employees want raises. An organization must manage both cooperation and competition among

stakeholders to grow and survive. All stakeholders have a common goal of organizational survival, but not

all goals are identical.

o Negotiation

It is the process used by two or more parties to reach a mutually agreeable arrangement to exchange goods

and services. Managers need negotiating skills to be effective in today's global, diverse, dynamic, teamoriented

business environment. Culture significantly affects the negotiation process. Negotiators from

masculine cultures emphasize assertiveness and independence, which can cause them to see negotiation as a

competition and spur them to win at all costs. Negotiators from cultures comfortable with uncertainty will

take a creative, problem-solving approach, while those from high uncertainty-avoidance cultures will

emphasize bureaucratic rules and procedures. Power-distance, individuality-collectivism, high or low

context, emotion, and time-orientation dimensions also affect negotiation.

Beyond a certain point, conflict hurts the organization and causes decline. Managers spend time bargaining,

rather than making decisions. An organization in decline cannot afford to spend time on decision-making,

because it needs a quick response to recover its position. Group’s battle for their interests, no agreement is

reached, and the organization floats along, falling prey to inertia.

Bargaining issues in negotiation process can be divided into three categories: mandatory, permissive, and


o Mandatory Bargaining Issues—Fall within the definition of wages, hours, and other

terms and conditions of employment.

o Permissive Bargaining Issues—May be raised, but neither side may insist that they be

bargained over.

o Prohibited Bargaining Issues—Are statutorily outlawed.


o Negotiation Strategies

Figure shows four negotiating strategies based on the importance of the substantive outcome and the

importance of the relationship outcome. These four strategies are trusting collaboration, firm competition,

open subordination, and active

avoidance. Trusting

collaboration is a win-win

strategy most appropriate when

both the substantive task

outcome and the relationship

outcome are important. Firm

competition is used when the

substantive task outcome is

important but the relationship

outcome is not. Open

subordination is applied when

the task outcome is not

important but the relationship

outcome is. Active avoidance is

useful when neither the task

outcome nor the relationship

outcome is important.

When two parties are unable to

come to agreement during

negotiations, they may bring in a

third party to help resolve the differences. Conciliation and consultation focus on improving interpersonal

relations to foster constructive discussion of issues. Mediation considers both interpersonal and substantive

issues and relies on formal evaluation of positions plus persuasion to bring about a non-binding solution.

Arbitration, a legally binding process in which the arbitrator imposes a solution, can be used when all other

methods have failed and the conflict must be urgently resolved.

Common mistakes made when negotiating include:

Irrational escalation of commitment; thinking the pie is fixed; winner's curse; and overconfidence. Avoiding

these common mistakes requires managers to be aware of the issues, be thoroughly prepared, and be willing

to rely on expert opinion to reduce the possibility of making mistakes.


Conflict Conflict is the process in which one party perceives that its interests are

being opposed or negatively affected by another party.

Task conflict Conflicts over content and goals of the work

Relationship conflict Conflict based on interpersonal relationships

Process conflict Conflict over how work get done

Vertical conflict It occurs between groups at different levels of the organization.

Horizontal conflict It takes place between departments or groups at the same level of the


Negotiation It is the process used by two or more parties to reach a mutually agreeable

arrangement to exchange goods and services.

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